Anti-money laundering rules
The Money Laundering Regulations (MLR) are designed to protect the UK financial system and put in place certain controls to prevent businesses being used for money laundering by criminals and terrorists.
Many businesses are monitored by the Financial Conduct Authority (FCA) or certain professional bodies. However, businesses that HMRC is responsible for supervising should be aware of the requirement to register with HMRC and the penalties for not doing so.
HMRC is responsible for supervising ... read more
New style £50 note to be introduced
In a joint statement issued by HM Treasury and the Bank of England it had been confirmed that the £50 note is to continue to be part of the UK currency. The new £50 note will be designed and printed on polymer, a thin flexible plastic that includes a number of important new security features. Polymer notes are cleaner, safer and stronger than existing paper notes.
We have already witnessed the launch of new £5 and £10 notes. A new £20 note featuring J.M.W Turner is expected to enter ... read more
Tax to pay if you exceed the annual pensions allowance
The annual allowance for tax relief on pensions has been fixed at the current level of £40,000 since 6 April 2014. The previous allowance was £50,000 and prior to 6 April 2011, the annual allowance was as high as £255,000.
The annual allowance is further reduced for high earners. Those with income in excess of £150,000 will usually have their allowance tapered. For every complete £2 their income exceeds £150,000 the annual allowance is reduced by £1, up to a maximum reduction of £30,000 for ... read more
Son’s failed investment in father’s company
A recent Upper Tribunal case examined whether a sole trader operating a skip hire business was entitled to Income Tax relief on irrecoverable loans made to a company. The company was owned by the sole trader’s father. HMRC had rejected the claim for Income Tax relief on the basis that the loans were capital investments and were not wholly and exclusively laid out for the purposes of trade.
The sole trader appealed this decision to the First-tier Tribunal (FTT) where his appeal was dismissed. ... read more
Electing not to have Incorporation Relief
If a taxpayer owns a business as a sole trader or in partnership, a capital gain will be deemed to arise if the business is converted into a company by reference to the market value of the business assets including goodwill. This may give rise to a chargeable gain based broadly on the difference between the market value of the assets and their original cost.
A number of options exist in such situations. One of these involves arranging the incorporation of the business so that it satisfies the ... read more
Tapering of residence nil rate band
The Inheritance Tax main residence nil-rate band (RNRB) came into effect on 6 April 2017. The RNRB is a transferable allowance for married couples and civil partners (per person) when their main residence is passed down to a direct descendent, such as children or grandchildren, after their death. The RNRB is on top of the existing £325,000 Inheritance Tax nil-rate band (NRB) threshold.
The RNRB is being introduced in stages; it commenced at £100,000 in 2017-18, increased to £125,000 in 2018-19 ... read more
Finance (No.3) Bill and the Budget
The Financial Secretary to the Treasury, Mel Stride has confirmed that the government will publish Finance (No.3) Bill on Wednesday, 7 November 2018. The Bill is so named as it is the third Finance Bill in the current special two-year session of Parliament. The Bill will contain the legislation for many of the tax measures announced by the government. The Bill is colloquially known as Finance Bill 2018-19 and will become Finance Act 2019 after Royal Assent is received.
The publication of the ... read more
MTD for VAT pilot extended
The introduction of Making Tax Digital (MTD) for VAT is fast approaching. From April 2019, some 1 million businesses with a turnover above the VAT threshold (currently £85,000) will have to keep their records digitally (for VAT purposes only) and provide their VAT return information to HMRC through MTD compatible software.
An initial private beta pilot of MTD for VAT was launched in April this year. HMRC has now confirmed in a press release that the pilot has been extended to businesses whose ... read more
Data protection self-assessment checklist launched for small business owners
The Information Commissioner's Office (ICO) has launched a self-assessment checklist to help small business owners and sole traders to assess their compliance with the GDPR and the Data Protection Act 2018.
The ICO’s interactive online checklist asks users to answer a series of eight questions by giving either a “yes”, “no” or “in part” answer. At each stage, the user can first click to view more information on the particular question. Once all questions have been completed, an overall “green”, ... read more
Company director imprisoned
A director of a company that manufactured security systems has been found guilty of two counts of fraudulent trading and one count of fraudulently removing property in anticipation of winding up. He was sentenced to two years in prison after defrauding his creditors to the tune of £600,000. The man has also been banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company under an eight year directorship ... read more